Case Studies

In October 2000, LGV backed the acquisition of Bourne Leisure and Rank's Holiday Division to create a new force in the British holiday market valued in excess of £900 million. The combined business serves over 2.5 million holidaymakers a year through leading brands such as British Holidays, Butlins, Haven and Warner.

LGV invested in Bourne Leisure in 1997, having first discussed the possibility of acquiring Rank's Haven caravan business with Bourne Leisure management in 1993. The £700 million acquisition from Rank represented the culmination of this process and was financed in part by LGV, which took a 14.5% shareholding in the combined grouping, the largest institutional interest in the business. The founders of Bourne Leisure remained majority shareholders in the business.

Through its Haven and British Holidays brands, Bourne Leisure is the largest caravan park operator in the UK. Butlins operates three family entertainment resorts and Warner has 13 hotels and resorts.

In the first year following the acquisition a number of specific initiatives were successfully concluded. 36 smaller Haven caravan parks were sold in early 2001 in a series of separate transactions for an aggregate £110m. This enabled Bourne Leisure to focus on Haven's larger parks consistent with its skills as operator of the British Holidays parks. In addition Oasis, the forest holiday village business based in Cumbria was sold to the owner of Center Parcs for £140m.

Having successfully integrated the head offices and sold the non-core businesses, the emphasis shifted to investing in the remaining portfolio. This produced good trading results enabling the company to repay the mezzanine loan and LGV's loanstock early and to buy back LGV's equity in February 2004, generating a total return for the LGV1 fund in excess of twice the original investment.

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